Seminar – The Liability of High Status and the Advantages of Brokerage in the Face of Environmental Shocks

Professor Andrew Shipilov, INSEAD

Status is a signal of quality in the environments characterised by “Spencian” uncertainty, such as, the uncertainty about the quality of actors given the steady state of their industry. However, when faced with “Knightian” uncertainty, for example, situations where market participants cannot set accurate odds for predicting quality based on affiliations with prominent industry participants, status’ reliability as a signal goes down. Instead, such environments favor network positions characterised by brokerage. Brokers are flexible in adapting their network to environmental changes which helps them thrive under Knightian uncertainty. We examine how the exogenous shock in the form of dot-com crash of 2000 affected investment banks’ ability to convert status and brokerage to performance. We find that, following this shock, high-status banks perform poorly, while brokers perform well.

Speaker bio

Andrew Shipilov is a Professor of Strategy and the John H Loudon Chair of International Management at INSEAD. In 2014, Professor Shipilov received a prestigious Emerging Scholar Award from the Strategic Management Society. He is an expert in the areas of strategy, innovation and networks. His current academic research examines how social networks, strategic alliances, and partnerships affect a firm’s competitive advantage.

Professor Shipilov’s work has been published in the leading management journals including the Academy of Management Journal, Administrative Science Quarterly, Organization Science, Social Networks, Strategic Organization, Industrial and Corporate Change, Managerial and Decision Economics. He also published in Harvard Business Review, MIT Sloan Management Review, and Talent Management Magazine.

He is an editorial board member of the Strategic Management Journal and Strategic Organization, two premier journals in strategy.

His research received prizes from the Academy of Management, the leading international association of management researchers.